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When taking out a title loan, it’s important to consider the Annual Percentage Rate (APR). This simple yet often misunderstood figure determines the total cost of your loan. Learn all about APR, how it works, and how it affects your title loan.

A small grey car on top of a calculator and a pen.

What is APR?

The Annual Percentage Rate represents the yearly cost of borrowing money, including interest and other fees. Unlike the interest rate alone, which only reflects the cost of borrowing money, APR provides a more comprehensive view of what you’ll pay over the life of the loan. This makes it one of the most important factors when comparing the affordability of different loan options.

How Title Loans Work

Title loans are short-term loans that use your car as collateral. They are easy to apply for and can get you the money you need in about 30 minutes. For this reason, title loans are often sought by people who need cash fast and may not qualify for traditional loans due to poor credit history. Here’s how it works:

  • You apply for a loan online or in person using your car as collateral.
  • The lender assesses your vehicle’s value and your ability to repay the loan with no credit check required.
  • Once approved, you receive the loan amount on the spot.
  • You continue to drive your car like normal while repaying the loan.

Average Title Loan Interest Rates

Title loans typically come with high interest rates of around 300% APR. The exact rate depends on your state, the lender, and your credit history. For example, some states have usury laws capping the maximum interest rate lenders can charge.

Title loans are also short-term, usually lasting 30 days to a few months. Interest accrues daily, increasing the total cost if you extend the loan term. Additional fees may also apply, including loan origination fees, processing fees, and late payment fees.

The Impact of a High-APR Title Loan

A title loan with a high APR can get expensive fast. For instance, a 30-day loan of $1,000 at 300% APR ends up costing $1,250 at the end of the term. The same loan costs $1,500 if you extend it to 60 days. Lengthening the loan to 90 days increases the cost to $1,750.

VIP Title Loans Offers the Lowest Rates in Texas

While many title loan providers charge predatory rates, VIP Title Loans genuinely wants to help you out of your tough financial situation. That’s why we offer the lowest rates in the industry, delivering fast, easy access to funds while reducing your total repayment amount. We even tailor your repayment plan to suit your financial situation and don’t charge prepayment penalties if you want to pay off your loan faster.

In short, you benefit from the lowest rates, the most flexible terms, and the fastest access to cash when you choose VIP Title Loans. To get started, please call us at 817-265-2274, fill out our online application form, or visit one of our five convenient locations in the DFW Metroplex.